Arsenal transfer news: Henrikh Mkhitaryan on Manchester United radar despite Gunners leading £25m race

Mkhitaryan is in the final year of his contract and has rejected an extension from Dortmund

Henrikh Mkhitaryan is available for £25m with both Arsenal and Manchester United interested (Getty)

Arsenal are facing competition from Manchester United in the battle to sign Borussia Dortmund midfielder Henrikh Mkhitaryan, with the Bundesliga club willing to let one of their prize assets leave for £25m.

Armenia international Mkhitaryan has refused to sign a new contract with Dortmund, with the German league runners-up deciding to sell the attacking midfielder this summer should a bid meet their valuation of the player. Rather than risk lose him for nothing next summer, Dortmund will instead let him leave providing they receive a £25m offer, with Arsenal reported to be leading the race to sign Mkhitaryan.

But according to the Daily Mail, the Gunners will now face competition from Premier League rivals United, while Liverpool and Juventus also remain in the picture. United have already made their first signing of the summer in the £30m former Villarreal defender Eric Bailly, and The Independent understands that the move for Zlatan Ibrahimovic will be completed once his Paris Saint-Germain contract expires at the end of the month.

Mkhitaryan and Ibrahimovic share the same agent in Mino Raiola, the man who paved the way for Paul Pogba to leave United in 2012 and join Juventus after running down the Frenchman’s contract. United received just £800,000 in compensation for Pogba’s departure, and with interest in bringing the midfielder back to Old Trafford, could face shelling out up to £78m for his signature.

Arsenal remain the bookmakers’ favourites to sign Mkhitaryan should he leave Dortmund, although Raiola insisted that no decision had been made and did not rule out the Armenian extending his contract at some point next season, should he remain at the German club.

"Why would we sign a contract renewal now?" Raiola told German newspaper Bild last week.

"Micki has a contract until June 2017 and we are looking at his options for the future."

Dortmund were determined not to let Mkhitaryan leave this summer, having already seen Ilkay Gundogan and Mats Hummels depart for Manchester City and Bayern Munich respectively. Having seen other key players such as Mario Gotze and Robert Lewandowski leave the club in recent seasons, Dortmund are eager to shed their reputation of being a selling club, but their hand is being forced by letting Mkhitaryan’s contract run down to its final 12 months.